Three Steps Toward More Profitable Branches

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SCOTTSDALE, Ariz.-Terence Roche, principal with Cornerstone Advisors, offered these three points for making branches more profitable:

1. Focus on the types of relationships a branch has. The "right" account is being that member's primary financial institution. That means checking accounts and loans, not "hot" CD money.

2. Consider a number of cost savings initiatives, starting with staff hours. Look at transaction numbers to determine if staying open late into the evening or on Saturdays is generating more transactions, or if the CU is paying more for the same number of transactions. Management costs also should be on the table. Roche said in rural areas quite often there is one manager for two branches, between which he/she splits time.

3. Technology can be used, including self-service kiosks.

"I want to get the branch profitable, so look at core relationship growth, overhead and personnel costs, and technology costs-which can be difficult to cut. Also consider special compensation that incentivizes employees to help the branch grow."

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